Sunday, December 10, 2017

Why "Handle With Care" Should Be the Watchword for A.I. in Marketing

Artificial intelligence has been one of the hottest topics in B2B marketing in 2017. The hype surrounding A.I. and related topics, such as machine learning and predictive analytics, has been almost deafening. Many industry pundits are asserting that A.I. is already revolutionizing the practice of B2B marketing.

While some of the claims made about artificial intelligence are exaggerated, it seems clear that A.I. has the potential to be one of the most powerful marketing tools we've seen in the past several years. But some uses of artificial intelligence also have the potential to trigger negative reactions from potential customers. So, before marketers fully embrace artificial intelligence, they need to understand how people feel about A.I. generally, and more specifically, how people view the use of A.I. in marketing.

Syzygy (a WPP digital agency group) recently published the results of an August 2017 survey that was designed to uncover the attitudes of American consumers about artificial intelligence. This survey generated 2,000 responses from individuals in the US, with equal participation by men and women. The respondents were equally split among Millennials, Generation X, and Baby Boomers.

For this study, Syzygy defined artificial intelligence as "technology that behaves intelligently, using skills we normally associate with human intelligence, including the ability to hold conversations, learn, reason and solve problems."

Syzygy found that US consumers have a broad range of feelings - both positive and negative - about artificial intelligence. When survey participants were asked how they feel when they think about A.I., the top four feelings identified were:

  1. Interested (45% of respondents)
  2. Concerned (41%)
  3. Skeptical (40%)
  4. Unsure (39%)
When Syzygy asked survey participants to describe how positive or negative their feelings are about A.I., the results show that strong feelings are the exception, not the rule. Eighty-six percent of respondents described their feelings as neutral, mildly positive, or mildly negative.

Syzygy also asked survey participants several specific questions about the use of artificial intelligence for marketing purposes. The good news for marketers is that over two-thirds of Americans are open to companies using A.I. to communicate with and serve them. However, the study also revealed attitudes that should concern marketers. For example:
  • Seventy-one percent of respondents said that companies should need their express consent before using A.I. to market to them.
  • Nearly nine out of ten respondents (89%) said that the use of A.I. in marketing "should be regulated with a legally-binding code of conduct."
The lesson from this research is that marketers should approach the use of A.I. cautiously and be sensitive to the skepticism and concern it can create. Marketers will need to stress the benefits and value that A.I.-powered applications can produce for customers, and above all else, they must be open and transparent about how they are using artificial intelligence in their marketing efforts.

Image courtesy of James Whatley via Flickr CC.

Sunday, December 3, 2017

Why Proving the Impact of Marketing is Difficult

For several years, marketing leaders have faced growing demands from the C-suite to prove the value of their activities and programs. Marketing accountability has become the mantra for many CMO's, and return-on-investment has become the gold standard for measuring marketing performance. Several books and a host of white papers and ebooks have been written about marketing performance measurement, and dozens of webinars and conference presentations have been devoted to the topic.

But despite all of this attention and brainpower, proving the financial value of marketing is still challenging for many marketing leaders. Data from The CMO Survey - conducted by Dr. Christine Moorman with Duke University's Fuqua School of Business - demonstrates both the significance and the persistence of the challenge. The CMO Survey has been conducted semi-annually for the past several years, and the following chart shows the percentage of surveyed CMO's who have reported they are able to show the impact of marketing spending quantitatively.

Over the past three years, less than half of the surveyed CMO's have said they are able to quantitatively measure the impact of marketing spending on business results.

Proving the economic value of marketing is challenging for several reasons. A recent article in the Journal of Marketing summarized the difficulties as follows:

". . . marketing aims to create and stimulate favorable customer attitudes with the goal of ultimately boosting customer demand. This demand, in turn, generates sales and profits for the brand or firm, which can enhance its market position and financial value . . . As a result, marketing has multiple facets, some attitudinal, some behavioral, and some financial. However, the relation between the metrics that assess these facets is complex and nonlinear . . ."

Measuring the value of marketing activities is a complex undertaking, but the heart of the challenge is usually attribution. Attribution is the process of assigning both revenues and costs to a marketing activity or program, and it's impossible to accurately measure the financial value of a marketing program unless you can accurately assign economic benefits and costs to it. So, the accuracy of your value or ROI calculation ultimately depends on the accuracy of your attribution model. 

The State of Marketing Attribution

A few weeks ago, Econsultancy (in association with AdRoll)  published the results of a study regarding the use of marketing attribution, the goals and benefits of attribution, and the effectiveness of various attribution methods.

The State of Marketing Attribution 2017 report is based on a survey that produced 987 responses from both in-house marketing professionals ("company respondents") (74%) and professionals from agencies, consulting firms, vendors, etc. (26%). Respondents were based in Europe (53%), North America (22%), and Asia Pacific (22%). Company respondents came from both B2B and B2C enterprises operating in a wide range of industries.

Econsultancy found that the use of marketing attribution is growing. Eighty-one percent of company respondents said they are practicing attribution at some level, up from 79% in the 2016 edition of the survey. Thirty-nine percent of company respondents said they are using attribution with most or all of their marketing programs, up from only 31% in 2016.

Econsultancy also found that a growing number of companies are using attribution models that encompass both digital and offline channels. In the 2017 survey, 60% of company respondents said they are using some type of multichannel attribution, up from only 42% in the 2016  survey.

On the surface, the growing use of marketing attribution looks like a positive development. However, Econsultancy's research also revealed some troublesome facts about how marketing attribution is currently practiced. The survey asked participants to identify the specific attribution methods they are using and rate the effectiveness of each method. The following table shows the percentage of company respondents using each attribution method, and the percentage rating each method as very or somewhat effective:

These findings are disturbing because the three most widely-used attribution methods (and four of the top five) are methods that assign all of the revenue from a sale to one marketing touch point. Even more disturbing, large majorities of the survey respondents rated these methods as very or somewhat effective - 92% for first touch, 86% for first click, 85% for last touch, and 74% for last click. In reality, none of these "single touch" attribution methods will produce an accurate assessment of performance of value.

The Econsultancy research also found that most companies don't act on the insights derived from marketing attribution. The survey asked participants to indicate their agreement or disagreement with this statement:  "We don't action the insights we get from attribution." Twenty-three percent of company respondents strongly agreed with the statement, and another 47% agreed somewhat.

It's likely that marketers aren't relying on the results they obtain from attribution because they lack confidence in the validity of the attribution models they are using. They intuitively recognize that those models are incomplete at best, and may be seriously flawed.

The Bottom Line

Proving the impact of marketing is likely to remain challenging for the foreseeable future. Accurately attributing revenue to a marketing activity is a difficult task, particularly for companies with complex sales cycles that involve multiple decision makers.

The most important first step is to stop using all forms of single-touch attribution (first-touch, first-click, last-touch, and last-click). Except in rare cases, any single-touch attribution method will produce inaccurate results and lead to poor marketing decisions.

Custom attribution was regarded as the best attribution method by participants in the Econsultancy research, with 48% of the respondents rating it as very effective. Developing and implementing a custom attribution model requires a fair amount of thought and time, but the benefit is a more accurate view of marketing performance.

Top image courtesy of Rick B via Flickr.

Sunday, November 26, 2017

Two Ways to Boost the Impact of Personalization in 2018

Delivering outstanding customer experiences has become a primary strategic objective for both B2B and B2C marketers. In the 2017 Digital Trends report by Econsultancy (in association with Adobe), surveyed marketing, digital, and ecommerce professionals selected optimizing the customer experience as their single most important opportunity for 2017, and they identified customer experience as the primary way they will differentiate their company from competitors over the next five years.

Most marketers now recognize that personalization is a critical ingredient in the recipe for great customer experiences. In a 2017 survey of marketing and business leaders by Researchscape International (in association with Evergage), nearly all (96%) of the respondents agreed that personalization helps advance customer relationships, and 88% agreed that their prospects and customers expect a personalized experience.

In the Econsultancy study, survey respondents identified targeting and personalization as a top digital priority for 2017 (behind only content marketing and social media engagement), and half (51%) of the respondents said they would increase their spending on personalization this year.

But despite all the recent focus on personalization, it's clear that most companies have more work to do to maximize the benefits of personalized marketing. In the Researchscape survey, only 30% of respondents were very or extremely satisfied with the level of personalization in their marketing programs, and 46% gave themselves a grade of "C" or lower on their current personalization efforts.

Other research has shown that many buyers aren't particularly impressed with the personalization efforts they encounter:

  • In a survey by Adobe, 71% of consumers said they like receiving personalized offers, but 20% reported that offers are not done well.
  • In a study by the Economist Intelligence Unit, 70% of survey respondents said that many of the personalized messages they receive are annoying because the attempts at personalization are superficial.
So what can be done to improve the effectiveness of personalization? There are two important steps that companies can take to boost the impact of their personalization efforts in 2018.

Make It Valuable

To be effective in today's competitive environment, personalization must provide meaningful value to customers and prospects. Personalization that is superficial or superfluous - i.e. personalization that is merely "window-dressing" - simply won't cut it.

Recent research has confirmed that buyers want to get practical value from their interactions with companies and brands. For example, in a survey of consumers conducted earlier this year by the CMO Council and SAP Hybris, nearly half of the respondents defined value as something that saves them time (49%) or makes their lives easier (47%).

Value is equally important to B2B buyers. In a 2017 survey of B2B buyers, Aberdeen Group asked participants what factors they consider when choosing a vendor. Over two-thirds (68.2%) of the respondents said the vendor can help sharpen our competitive differentiation, and over half (55.7%) said the vendor can help me identify new possibilities and avenues for revenue.

Personalization can be a powerful way to enhance the value of interactions with customers and prospects, but it must be designed with that objective in mind. Therefore, marketers should evaluate any proposed personalization initiative by asking a basic question:  How will this application of personalization provide practical value to our customers and/or prospects?

Make It (Mostly) Invisible

Since the early days of personalized marketing, the most common way to personalize a marketing message has been to include specific facts about the recipient in the message, a practice that can be called explicit or overt personalization. 

It's as if marketers believe that the effectiveness of personalization is based on communicating to the customer or prospect what they know about him or her. There may have been some truth to this belief when any form of personalization was rare. Now, however, most types of overt personalization are largely ineffective (because they are so common), and they can be seen as "creepy" by customers or prospects.

Today, personalization is usually more effective when it's invisible. The best personalization doesn't feel like personalization - it just feels like a message or experience that's really relevant, appropriate, and valuable.

There are, of course, some situations where overt personalization is still effective. For example, online stores (such as Amazon) often provide personalized product recommendations that are introduced by a phrase like, "People who ordered [Product X] also purchased . . ." When the personalization algorithm works well, these recommendations can be useful to customers, and most buyers don't view such recommendations as intrusive or creepy.

Illustration courtesy of Michael Coghlan via Flickr CC.

Sunday, November 19, 2017

Research Says B2B Buyers Want Strategic Partners

For decades, the basic approach to B2B marketing and sales has been to identify a prospect's "pain points," and then demonstrate how your product or service can alleviate the pain. New research now suggests that many buyers look beyond immediate pain and take a more strategic approach to B2B buying.

A recent study by the Aberdeen Group (in collaboration with PJA Advertising and Marketing) indicates that B2B buyers are looking for vendors who can help them achieve strategic company goals, improve competitive differentiation, and identify new growth opportunities. The What Do B2B Buyers Want? report is based on a survey of over 250 B2B buyers from a range of industries and company sizes.

When survey participants were asked to select two factors (from a list of nine) that play a role in their buying decisions, the three most frequently chosen factors were:

  1. Total cost of ownership (45% of respondents)
  2. How the vendor/solution supports our company's goals (42%)
  3. Efficiency gains (ROI) (40%) 
When survey participants were asked what other factors they consider when they make buying decisions, 68.2% of respondents said the vendor can help sharpen our competitive differentiation, and over half (55.7%) said the vendor can help me identify new possibilities and avenues for revenue.

Viewed together, these survey responses make two points. First, B2B buyers are still focused on cost and ROI, and those economic factors remain at the core of B2B buying decisions. And second, many of the buyers in this survey panel appear to be taking a more strategic approach to buying decisions, once basic financial criteria are satisfied. 

It's noteworthy that when survey participants were asked how they usually know when they need to buy something, over two-thirds (67.2%) of the respondents said, "When our business strategy calls for it."

The Aberdeen study also found that B2B buyers are looking for vendors who can help them think through the business issues they are facing, and who are willing to challenge their current business practices. When survey participants were asked if they are more likely to work with a vendor who challenges they way they currently do business, almost two-thirds (65.4%) of the respondents answered, "Yes." So, the Aberdeen research provides support for the approach to B2B marketing and sales advocated by CEB in The Challenger Sale.

The Aberdeen study could be good news for B2B marketing and sales professionals, if the survey findings reflect the attitudes of a significant number of B2B buyers. The traditional "pain-solution" approach has a serious limitation because, at any given point in time, most potential buyers are not experiencing enough pain to take action. The Aberdeen research indicates that some business buyers are willing to look beyond the absence of immediate pain and consider longer-term strategic issues.

Illustration courtesy of Naval Surface Warriors via Flickr CC.

Sunday, November 12, 2017

Why Sales Content Management Needs More Work

There's no longer any doubt that content has become the currency of marketing and sales for virtually all kinds of B2B companies. According to the latest content marketing survey by the Content Marketing Institute and MarketingProfs, 91% of North American B2B companies now use content marketing in some form.

Content also provides the fuel for productive interactions between sales reps and potential buyers. Today's business buyers have become accustomed to using content to support their buying decisions, and they now expect sales reps to provide relevant content resources to complement their in-person conversations.

Unfortunately, research has shown that many B2B companies have a serious content underutilization problem. Three years ago, an analysis by SiriusDecisions found that 65% of all the content owned by a typical B2B company is not used, and that 28% of the content isn't used because it's "unfindable." (2014 State of B-to-B Content Survey)

In my experience, sales content management remains a significant challenge for many B2B companies, and new research from CSO Insights helps explain why the challenge is so persistent. The 2017 Sales Enablement Optimization Report is based on survey responses from "just under" 500 sales professionals. Survey respondents represented a wide range of industries and company sizes (from less than $10 million to more than $1 billion in annual revenue).

The CSO Insights study provides a wealth of information regarding the current state of sales enablement, and it's a worthwhile read for B2B marketing and sales professionals. In the 2017 study, CSO Insights found that content had become the fourth most significant service provided by the sales enablement function, trailing only sales training, sales tools, and sales process improvements.

CSO Insights also asked survey participants about the primary approaches they are using to get content into the hands of salespeople. The following table show how the 2017 study participants responded:

As this table shows, 29.0% of survey respondents said they are using email to distribute content to sales reps, and another 22.6% said they have multiple content repositories. Only 16.7% of the respondents said they have a single repository for sales content, and a similar percentage said they use a sales enablement technology solution to manage sales content.

Using email to distribute content to salespeople puts the burden of managing content on individual sales reps, and having multiple content repositories can significantly increase the time it takes sales reps to find the content they need - if they find it at all.

This anemic adoption of sales content management solutions provides at least part of the explanation for the continuing sales content management challenges facing many B2B companies. Today's sales enablement/sales content management solutions offer robust capabilities that can streamline sales content management processes and increase the effective utilization of sales content assets.

When CSO Insights asked survey participants who are using a sales content management solution to describe its benefits, 50.9% of respondents said that it improves salesperson access to sales content and tools, and 38.0% said it reduces search time for content and collateral.

If your company has more than a handful of sales reps, these solutions should be on your radar.

Top image courtesy of Carolyn Coles via Flickr CC.

Sunday, November 5, 2017

Debunking a Myth About Millennial B2B Buyers

In 2015, Millennials became the largest generational cohort in the US population and the largest generation in the US labor force. Research studies by the IBM Institute for Business Value, Google/Millward Brown Digital, Sacunas (now Merit), and SnapApp/Heinz Marketing have shown that Millennials are now playing significant roles in B2B purchase decisions. So it seems clear that we are in the early stages of a generational shift in B2B buying.

This generational shift raises an important issue for leaders of B2B companies:  Do the attitudes, preferences, and behaviors of Millennial B2B buyers require a different approach to marketing and sales? 

The popular view among industry pundits is that Millennial buyers have distinctive characteristics which require different marketing and sales methods and tactics. One recent research report emphatically stated that "the Millennial buyer is impacting the entire buying journey and the old marketing and sales tactics won't work."

In reality, many of the claims made about the attributes of Millennials are greatly oversimplified or just plain wrong. The global research firm Ipsos recently characterized Millennials as "the most carelessly described group we've ever looked at." In a detailed analysis of Millennial attitudes and behaviors published earlier this year, Ipsos wrote, "Myths and misunderstandings [about Millennials] abound, with bad research jumping to general conclusions based on shallow caricatures about a group that makes up 23% of the population."

Most researchers define the Millennial generation as individuals born from about 1981 through about 1997. The two other generational cohorts relevant to B2B marketing and sales professionals are Generation X and Baby Boomers. Generation X is typically defined as individuals born from 1965 through 1980, and the Baby Boom generation is defined as individuals born from 1946 through 1964.

Clearly, B2B marketing and sales professionals must recognize that Millennials have become active participants in the B2B buying process, and they must be prepared to engage Millennial buyers on their terms. But recent research has shown that Millennial B2B buyers are more like their Gen X and Baby Boomer counterparts than is usually recognized. To develop and implement effective strategies and programs, marketing and sales leaders must be able to separate Millennial myths from Millennial realities.

Millennial Myth vs. Millennial Reality

One of the most pervasive myths about Millennial B2B buyers is that they are digital addicts who prefer to do everything online. According to this myth, Millennials access and consume information primarily, if not exclusively, via digital channels, and they tend to view other means of communication with a certain degree of disdain.

Like many myths, this one has a basis in reality. Millennials are the first generation to grow up surrounded by digital technologies. Many Millennials have been using digital technologies since they were children or young teenagers. Gen X-ers and Baby Boomers, on the other hand, largely began using digital technologies in their everyday lives as adults. So, it's probably accurate to say that, on average, Millennials are more comfortable and more proficient with some digital technologies than older generations.

But there is strong evidence that the "comfort and proficiency gap" has narrowed significantly. For example, the research by Ipsos found that large majorities of all three generational cohorts access the internet on a daily or almost daily basis, and that Gen X-ers are almost as likely as Millennials to use a smartphone to go online. Ipsos did find that Millennials spend considerably more time online on their smartphones than older generations, which indicates that the comfort gap hasn't disappeared completely.

The Ipsos research demonstrates that members of all generations are now relying on digital technologies to obtain information and communicate. This isn't something that's unique to Millennials. The similarities between Millennials and Generation X are particularly relevant for B2B marketing and sales professionals because most of today's B2B buyers will be found in these two generational cohorts.

Research also shows that Millennial B2B buyers, like older buyers, rely on non-digital sources of information to support buying decisions. In a recent survey of B2B buyers by the IBM Institute for Business Value, study participants were asked what sources of information they are most likely to turn to when researching a vendor's products or services. The following table shows how nine sources of information (digital and non-digital) were ranked by respondents in each of the three generational cohorts:

As this table shows, the three research sources most preferred by Millennial buyers are all non-digital. In the study report, IBM suggested that one possible explanation for this somewhat surprising result is that Millennial respondents view online research as routine, and that they were focusing on sources of information that could provide richer insights about what it would be like to work with a particular vendor.

Ipsos addressed a similar issue in its research and found that the distinctive attribute of Millennials is that they typically draw on a broader and more varied pool of information resources than older generations. Millennials tend to seek out more sources of information, and they seem to be more comfortable than older generations at integrating information from multiple sources.

Two Key Takeaways

To sum things up, the idea that Millennial B2B buyers are digital addicts who prefer to do everything online is a myth. The evidence just doesn't support it.

The available evidence does provide two key takeaways for B2B marketing and sales professionals.

  • First, it's critical for B2B companies to provide marketing and sales content and messaging in digital form and to leverage digital channels to engage potential buyers. But this isn't only because Millennials are now active participants in B2B buying decisions. The reality is, buyers of all ages now rely extensively on digital content and digital communication channels.
  • And second, it's vital to remember that Millennial B2B buyers want to interact with a potential vendor in non-digital ways. Millennials may be "digital natives," but at some stages of the buying journey, they value person-to-person interactions.
Top image courtesy of ITU Pictures via Flickr CC.

Sunday, October 29, 2017

Why ABM-ers Need to be Proficient at SAM

In an earlier post, I explained why most companies should look first to existing customers when selecting ABM accounts. There are two main reasons for giving priority to existing customers. First, many B2B companies have a small group of customers that produce a large percentage of total revenue and are therefore critical to the company's well-being. These customers merit the special attention that ABM provides. And second, companies have (or should have) rich "intelligence" regarding existing customers that can fuel effective ABM programs.

Account-focused business strategies are not new. Long before anyone had heard of "account-based marketing," astute business leaders recognized the importance of giving special treatment to their most valuable customers. In the late 1950's, larger B2B companies began implementing account management programs to strengthen relationships with their largest customers.

Over the past five-plus decades, the practice of strategic account management (also known as key account management) has grown and matured significantly. Many companies now have well-established account management programs that are led by dedicated key account managers. Several years ago, the Strategic Account Management Association said that about two out of three companies had SAM programs of some kind, and it's highly unlikely that this number has gone down.

When account-based marketing, particularly Strategic ABM, is introduced in a company with an established account management program, the ABM effort must be fully integrated with the existing account management system. A well-conceived account plan for a strategic customer will provide a comprehensive description of the company's strategy for growing its relationship with that customer, and it's important to have a single, unified strategy for each key customer. ABM activities provide the marketing components of the company's account management plan for each strategic customer.

To ensure that marketing activities are tightly integrated with the overall account plan, a marketer needs to be a member of each account management team. In A Practitioner's Guide to Account-Based Marketing, Bev Burgess and Dave Munn highlight this point when they write:  "The most successful ABM-ers are seen as part of the account team:  participating in its meetings, collaborating on the account plan development and execution, sharing the trials and tribulations of service or delivery issues, working flat out on major bids and celebrating success with the team."

If marketers want to be effective members of account teams, they will need to understand the fundamental principles and techniques of strategic account management. Fortunately, there is now a substantial body of knowledge regarding how to do strategic account management successfully, and there are many resources that marketers can use to learn the discipline. Here are two that I've found particularly useful.

The New Successful Large Account Management

The New Successful Large Account Management by Robert B. Miller and Stephen E. Heiman with Tad Tuleja is a revised and updated version of Successful Large Account Management, which was published in 1991. The revised version - published in 2011 - can no longer be called "new," but it describes a methodology for managing strategic accounts that is just as valid today as it was six years ago.

Strategic Account Management Association

The Strategic Account Management Association is a professional association that was formed in 1964 to support and further develop account management principles, practices, and professional skills. The SAMA website contains a wealth of account management resources. Many of the resources are free for SAMA members, and some are also available to non-members at no charge.